Which Is TRUE About The Cash Surrender Nonforfeiture Option?
a) Funds exceeding the premium paid are taxable as ordinary income.
b) After the cash surrender, the insured is covered for a grace period of 1 month.
c) The policy remains active for some time after the policyholder opts for cash surrender.
d) The policyholder receives the original cash value of the policy.
Answer: a) Funds exceeding the premium paid are taxable as ordinary income.